Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
| The American Pharmaceutical Company (APC) has a policy that all capital investments must have a five-year or less discounted payback period in order to be considered for funding. The MARR at APC is 9% per year. Is the above project able to meet this benchmark for funding? What is the payback period? |
Transcribed Image Text:To Find P
Discrete Compounding; /=9%
Single Payment
Compound
Amount
Factor
To Find F
Present
Worth Factor
Compound
Uniform Series
Present
Worth Factor
Sinking
Amount
Factor
Fund
Factor
Capital
Recovery
To Find F
To Find P
To Find A
Given P
Given F
Given A
Given A
Given F
Factor
To Find A
Given P
N
FIP
PIF
FIA
PIA
AIF
AIP
1
1.0900
0.9174
1.0000
0.9174
1.0000
1.0900
23
1.1881
0.8417
2.0900
1.7591
0.4785
0.5685
3
1.2950
0.7722
3.2781
2.5313
0.3051
0.3951
4
1.4116
0.7084
4.5731
3.2397
0.2187
0.3087
5
1.5386
0.6499
5.9847
3.8897
0.1671
0.2571
6
1.6771
0.5963
7.5233
4.4859
0.1329
0.2229
7
1.8280
0.5470
9.2004
5.0330
0.1087
0.1987
8
1.9926
0.5019
11.0285
5.5348
0.0907
0.1807
9
2.1719
0.4604
13.0210
5.9952
0.0768
0.1668
10
2.3674
0.4224
15.1929
6.4177
0.0658
0.1558
11
2.5804
0.3875
17.5603
6.8052
0.0569
0.1469
12
2.8127
0.3555
20.1407
7.1607
0.0497
0.1397
13
3.0658
0.3262
22.9534
7.4869
0.0436
0.1336
14
3.3417
0.2992
26.0192
7.7862
0.0384
0.1284
15
3.6425
0.2745
29.3609
8.0607
0.0341
0.1241
Transcribed Image Text:End of Year
0
1
234
5
6-10
Cash Flow
- $270,000
- $35,000
$60,000
$190,000
$230,000
$360,000
$95,000
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